The other direct operating expenses on the investment properties are not separately identifiable and the same are not likely to be material.

As at March 31,2024 and March 31,2023, the fair value of the property is K 12.22 crore and ' 12.02 crore respectively. These fair values of the investment property are categorized as Level 2 in the fair valuation hierarchy and has been determined by external, independent property valuer (registered valuer as per Companies Act, 2013), having appropriate recognized professional qualifications and recent experience in the location and category of the property being valued.

There are no internally generated Intangible Assets.

Note: The above details are net of Provision for IAUD K 53.66 crore (Previous year: ' 53.66 crore)

Additional Information in Respect of Note Nos. 2 to 6:

a) Freehold land includes K 4.63 crore (Previous year ' 2.20 crore) which, not being in the Corporation's possession and being under dispute, has been provided for in books of accounts.

b) Buildings include Ownership Flats having gross block of K 46.44 crore (Previous year ' 44.94 crore) in proposed / existing co-operative societies and others.

c) The Corporation has elected to continue the policy adopted under Previous GAAP for accounting the foreign exchange differences arising on settlement or translation of long-term foreign currency monetary items outstanding as of March 31, 2016 i.e. foreign exchange differences arising on settlement or translation of long-term foreign currency monetary items relating to acquisition of depreciable assets are adjusted to the carrying cost of the assets and depreciated over the balance life of the asset. Accordingly, “Other adjustments” include capitalization of foreign exchange differences (net) of K 57.75 crore (Previous year ' 617.46 crore).

d) Additions include capitalization of borrowing costs of K 1.21 crore (Previous year ' 0.97 crore).

e) Freehold Land, Plant and Equipment, Tanks and Pipelines, Railway Sidings, Buildings etc. jointly owned in varying extent with other Oil Companies / Railways / Port Trust: Gross Block K 951.27 crore (Previous year ' 935.56 crore), Cumulative Depreciation K 203.28 crore (Previous year ' 163.56 crore), Net Block K 747.99 crore (Previous year ' 772.00 crore). Further CWIP includes K 47.50 crore (Previous year ' 20.57 crore) on account of projects being executed jointly.

f) During the year, useful life of product dispensing units for MS/HSD have been reviewed by the Corporation and changed from existing 15 years to 10 years based on independent technical assessment resulting in increase in depreciation by K 145.20 crore.

g) Further useful life of electronic carousel & its downstream equipment and aviation refuelling equipment (including

refuellers & dispensers) classified under Plant & Machinery has been changed from 25 years to 15 years based on technical assessment resulting in increase in depreciation by K 22.96 crore and K 18.66 crore respectively.

h) CWIP balance of 2G Ethanol Bio-Refinery project at Bargarh are secured against charge of K 37.50 crore created in favor of Center for High Technology (CHT), a society under the administrative control of MoPNG.

i) Compenzation from third parties in respect of items of Property, Plant and Equipment / Capital work in progress that

were impaired, lost or given up during the year included in Statement of Profit and Loss is K 32.58 crore (Previous year

' 22.62 crore).

j) Gross Block Reclassifications / Deductions on account of Retirement / Disposal includes:

i) On account of retirement / disposal during the year K 1,139.97 crore (Previous year ' 864.81 crore)

ii) Assets classified as held for sale K 205.24 crore (Previous year ' 106.66 crore)

iii) Decapitalization of K 79.38 crore (Previous year ' 62.80 crore)

iv) Deduction on account of reclassifications during the year K 0.52 crore (Previous year ' 0.68 crore).

k) Depreciation and amortization for the year is K 6,779.76 crore (Previous year ' 6,375.68 crore) from which, after reducing -

i) Depreciation on decapitalization of K 8.75 crore (Previous year ' 11.36 crore) and

ii) Depreciation on reclassification of assets of K 20.90 crore (Previous year ' 16.84 crore) the

Net Depreciation and amortization for the year charged to Statement of Profit and Loss is K 6,750.11 crore (Previous year ' 6,347.48 crore).

l) Deduction from accumulated depreciation on account of retirement / disposal / reclassifications during the year is K 1,189.52 crore (Previous year ' 845.29 crore).

m) The Corporation has assessed the useful life of Right of Way as indefinite where the same is perpetual in nature.

n) Further residual value of certain pipelines has been re-assessed as Nil, resulting in increase in depreciation by K 10.92 crore and similar impact in future years over remaining useful life.

Pursuant to Ministry of Corporate Affairs (MCA) orders sanctioning the Scheme of Amalgamation of erstwhile subsidiaries BORL and BGRL, received by the Corporation on June 22, 2022 and August 8, 2022 respectively, assets of erstwhile subsidiaries have been vested and amalgamated in the books of the Corporation and accounted for during the previous year as per Ind AS 103 “Business Combination”. The process of updating the name of the Corporation in respect of immovable properties of erstwhile subsidiaries BORL and BGRL is in progress.

Pursuant to Ministry of Corporate Affairs (MCA) orders sanctioning the Scheme of Amalgamation of erstwhile subsidiaries BORL and BGRL, received by the Corporation on June 22, 2022 and August 8, 2022 respectively, assets of erstwhile subsidiaries have been vested and amalgamated in the books of the Corporation and accounted for during the year as per Ind AS 103 “Business Combination”. The process of updating the name of the Corporation in respect of immovable properties of erstwhile subsidiaries BORL and BGRL is in progress.

The Write Down of Inventories to Net Realisable Value during the year amounted to K 238.14 crore (Previous Year: I 270.06 crore). The Reversal of Write Down during the year amounted to K 0.14 crore (Previous Year: I #) due to Increase in Net Realisable Value of the Inventories. The Write Down or Reversal of Write Down have been included under 'Cost of Materials Consumed' or 'Changes in Inventories of Finished Goods, Stock-in-trade and Work-In-Progress' in the Statement of Profit and Loss.

Non-Current Assets Held-for-Sale consist of items such as Plant and equipment, Dispensing pumps, etc. which have been identified for disposal due to replacement/ obsolescence of Assets which happens in the normal course of business. These Assets are expected to be disposed off within the next twelve months. On account of re-classification of these Assets, an Impairment loss of K 46.10 crore during the year (Previous Year: I 31.50 crore) has been recognized in the Statement of Profit and Loss. (Refer Note No. 43)

iii. The Corporation has only one class of Shares namely Equity Shares having par value of I 10 per share. Each Holder of Equity Shares is entitled to one vote per Equity Share. In the event of liquidation of the Corporation, the holders of Equity Shares will be entitled to receive the remaining assets of the Corporation in proportion to the number of Equity Shares held.

The Corporation declares and pays dividend in Indian Rupees. The final dividend, if any, proposed by the Board of Directors is subject to the approval of the Shareholders in the ensuing Annual General Meeting.

The Board of Directors in the meeting held on May 9, 2024, has recommended issue of bonus shares in the ratio of 1 equity share of I 10 each for every 1 existing equity share of I 10 each, which is subject to approval by the shareholders of the Corporation. Such bonus shares, if approved by members of the Company shall rank pari-passu with the existing equity shares.

*Includes accumulated Gain/(Loss) on account of remeasurements of Defined Benefit plans (Net of Tax) as on March 31, 2024 K (709.83) crore [Previous Year I (808.41) crore].

"Includes re-measurement gain of Nil (Previous Year: I 1,720.13 crore) recognized in the consolidated financial statements on acquisition of Bharat Oman Refineries Limited, subsequently recorded in Standalone Financial Statements on its merger with the Corporation (Refer Note No. 44).

Nature and Purpose of Reserves Capital reserve

It represents Capital Reserve appearing in the Financial Statements of erstwhile Kochi Refineries Limited (KRL) transferred on amalgamation and difference between the Investment made in Petronet CCK Limited (PCCKL) and the Share Capital received during the acquisition when the first time control was obtained.

Debenture Redemption Reserve

Debenture Redemption Reserve represents reserve created out of the profits of the Corporation available for distribution to Shareholders which is utilized for redemption of Debentures/Bonds.

General Reserve

General Reserve represents appropriation of Retained Earnings and are available for distribution to Shareholders. Securities Premium

The amount received in excess of the par value adjusted with additional cost of Equity Shares, if any, has been classified as Securities Premium. The same can be utilized for issuance of Bonus Shares, charging off Equity related expenses, etc.

Reserve on Business Combination

Reserve on Business Combination represents re-measurement gain recognized in the consolidated financial statements on acquisition of Bharat Oman Refineries Limited, subsequently recorded in Standalone Financial Statements on its merger with the Corporation.

Retained Earnings

Retained Earnings (excluding accumulated balance of remeasurements of Defined Benefit Plans (Net of Tax) and re-measurement gain on acquisition of Bharat Oman Refineries Limited) represents surplus/accumulated earnings of the Corporation and are available for distribution to Shareholders.

The Corporation offsets tax assets and liabilities if and only if it has a legally enforceable right to set off current tax assets & current tax liabilities and the deferred tax assets & deferred tax liabilities related to income taxes levied by the same tax authority.

*It includes K 0.06 crore pertaining to tax liability of "BPCL ESPS Trust" (Previous Year: ?0.18 crore)

**Pursuant to merger of BORL with the Corporation, the Corporation utilized unabsorbed depreciation of erstwhile BORL while filing Income Tax Return in FY 2021-22. Accordingly, the deferred tax on the unabsorbed depreciation has been reversed in short/ (excess) in previous year and correspondingly, current tax also has been reduced in short/ (excess) pertaining to earlier years. (Refer Note No. 44)

* Secured in favor of the participating banks ranking pari passu inter-alia by hypothecation of raw materials, finished goods, stock- in- process, book debts, stores, components and spares and all movables both present and future. [Refer Note no. 13 and 15]

**The Corporation has Triparty Repo Settlement System limits from Clearing Corporation of India Limited, the borrowing against which was K 299.83 crore as at March 31, 2024 (Previous Year Nil). These limits are secured by 7.59% Government Stock 2026 of face value aggregrating to K 370.00 crore (Previous Year I 370.00 crore).[Refer Note no. 14]

***The Corporation has Clearcorp Repo Order Matching Systems (CROMs) limits from Clearing Corporation of India Limited, the borrowing against which was K 1,699.96 crore as at March 31,2024 (Previous Year Nil). These limits are secured by Oil Marketing Companies GOI Special Bonds of face value aggregrating to K 3,882.37 crore (Previous Year Nil).[Refer Note no. 14]

The borrowings from banks and financial institutions have been used for the purposes for which such loans were taken.

The quarterly returns or statements of current assets filed by the Corporation with banks or financial institutions are in agreement with the books of accounts for FY 2022-23 and FY 2023-24.

(A) Bharat Oman Refineries Limited (BORL)

BORL was incorporated in 1994 as a Joint Venture between the Corporation and OQ S.A.O.C. (formerly known as Oman Oil Company S.A.O.C.). BORL was mainly engaged in the business of refining crude oil to produce and supply various petroleum products.

The Corporation held 63.38% stake in BORL (i.e. 1,53,82,16,114 Equity Shares) as on April 1, 2021 and additionally acquired balance 36.62% of Equity Shares (i.e. 88,86,13,336 equity shares) in BORL vide a Share Purchase Agreement (SPA) with Joint Venture Partner OQ S.A.O.C. (formerly known as Oman Oil Company S.A.O.C.) (“OQ”) on June 30, 2021, for a consideration of I 2,399.26 crore. By way of this transaction, BORL became wholly owned subsidiary of the Corporation.

Further, the Corporation acquired the remaining share warrants of BORL, held by Government of Madhya Pradesh, for a consideration of I 72.65 crore (including Stamp Duty).

As per the requirement of Ind AS 103, the Corporation, in the Consolidated Financial Statements for FY 2021-22, has recognized a gain on remeasurement of Investment held prior to above acquisition of I 1,720.13 crore as an Exceptional Item and Goodwill of I 1,203.98 crore on account of change in control.

Subsequently, the Board of Directors of the Corporation, at their meeting held on October 22, 2021 approved the Scheme of Amalgamation (BORL Scheme) for merger of BORL with the Corporation. Application seeking approval of the BORL Scheme was subsequently filed with Ministry of Corporate Affairs, New Delhi. The copy of order sanctioning the BORL Scheme was received by the Corporation on June 22, 2022 and upon filing the same with Registrar of Companies on July 1, 2022, BORL stands merged with the Corporation. The BORL Scheme has become effective from the appointed date of October 1, 2021.

(B) Bharat Gas Resources Limited (BGRL)

BGRL was incorporated in 2018 as a Wholly Owned Subsidiary of the Corporation with the main objective of carrying activities relating to the gas business. BGRL was engaged in City Gas Distribution (CGD) business, supplying natural gas to CGD market segments i.e., CNG Domestic, PNG Domestic, CNG Industrial/Commercial and PNG Industrial/ Commercial.

The Board of Directors of the Corporation, at its meeting held on March 22, 2021, approved the Scheme of Amalgamation (BGRL Scheme) for merger of BGRL with the Corporation. Application seeking approval of the BGRL Scheme was subsequently filed with Ministry of Corporate Affairs, New Delhi. The copy of order sanctioning the BGRL Scheme was received by the Corporation on August 8, 2022 and upon filing the same with Registrar of Companies on August 16, 2022, BGRL stands merged with the Corporation. The BGRL Scheme has become effective from the appointed date of April 1, 2021.

(C) Impact of Business Combinations

The Corporation has recorded all the assets, liabilities and reserves of BORL and BGRL vested in it pursuant to the respective merger schemes by applying the principles as set out in Appendix C of IND AS 103 'Business Combinations' and prescribed under Companies (Indian Accounting Standards) Rules, 2015 issued by the Institute of Chartered Accountants of India. Accordingly, the Standalone Financial Statements for FY 2021-22 of the Corporation have been restated, on account of BORL merger from the date of obtaining control i.e. June 30, 2021 and on account of BGRL merger from the beginning of the preceding financial year i.e. April 1, 2021.

NOTE 45

As per the scheme of amalgamation of the erstwhile Kochi Refineries Limited (KRL) with the Corporation approved by the Government of India, 3,37,28,737 equity shares of the Corporation were allotted (in lieu of the shares held by the Corporation in the erstwhile KRL) to a Trust (“BPCL Trust for Investment in Shares”) for the benefit of the Corporation in the FY 2006-07. Pursuant to the Bonus Shares issuances by the Corporation, "BPCL Trust for Investment in Shares” held 20,23,72,422 equity shares of the Corporation as at April 1, 2020.

“During FY 2020-21, Corporation had announced BPCL Employee Stock Purchase Scheme (ESPS) 2020 and created “BPCL ESPS Trust” for the purpose of acquiring shares for allotting to eligible employees. Accordingly, “BPCL ESPS Trust” had purchased 4,33,79,025 Equity shares from “BPCL Trust for Investment in Shares” in October 2020. The proportionate cost of ”BPCL Trust for Investment in Shares” was recognized as cost of shares held by “BPCL ESPS Trust”.

Further, during FY 2020-21, 12,60,33,090 Equity Shares were sold from “BPCL Trust for Investment in Shares” via Bulk Deal on Stock Exchange for Net Consideration of I 5,511.79 crore. Accordingly, Securities Premium of I 5,101.31 crore was recognized after adjusting the corresponding cost of I 410.48 crore (including Face Value of Equity Shares of I 126.03 crore) under Total Equity.

During FY 2021-22, Corporation allotted 3,65,42,077 shares to eligible employees on exercise of options by employees under BPCL Employee Stock Purchase Scheme (ESPS) 2020. Accordingly, Securities Premium of I 1,204.88 crore was recognized after adjusting the corresponding cost of I 119.01 crore (including Face Value of Equity Shares of I 36.54 crore) under Total Equity.

Further, during FY 2023-24, 68,36,948 Equity Shares were sold from “BPCL ESPS Trust” via block Deal on Stock Exchange for Net Consideration of I 378.60 crore (Net of Tax). Accordingly, Securities Premium of I 356.33 crore was recognized after adjusting the corresponding cost of I 22.27 crore (including Face Value of Equity Shares of I 6.84 crore) under Total Equity.

Consequent to the above, “BPCL ESPS Trust” and “BPCL Trust for Investment in Shares” held NIL and 3,29,60,307 equity shares of the Corporation respectively as at March 31, 2024.

The cost of the original investment together with the additional contribution to the corpus of above trusts have been reduced from “Paid-up Share Capital” to the extent of face value of the shares and from “Other Equity” under separate reserves for the balance amount. The income received from “BPCL Trust for Investment in Shares” and the impact on consolidation of “BPCL ESPS Trust” has been recognized directly under “Other Equity”.

The Corporation has entered into service concession arrangements with entities supplying electricity (“The Regulator”) to construct, own, operate and maintain a wind energy based electric power generating station (“Plant”). Under the terms of agreement, the Corporation will operate and maintain the Plant and sell electricity generated to the Regulator for a period which covers the substantial useful life of the Plant which may be renewed for such further period as may be mutually agreed upon between the parties. The Corporation will be responsible for any maintenance services during the concession period.

The Corporation in turn has the right to charge the Regulator agreed rate as stated in the service concession arrangement.

The fair value towards the construction of the Plant has been recognized as an Intangible Asset and is amortized over the useful life of the asset or period of contract whichever is less.

NOTE 49: DISCLOSURES AS PER IND AS 116 LEASES

The Corporation enters into lease arrangements for land, godowns, office premises, staff quarters, third party operating plants, tank lorries, time charter vessels and others. Pursuant to Ministry of Corporate Affairs Notification dated March 30, 2019, Ind AS 116 “Leases” applicable w.e.f. April 1, 2019 is adopted by the Corporation using modified retrospective method wherein, at the date of initial application, the lease liability is measured at the present value of remaining lease payments and Right-of-Use asset has been recognized at an amount equal to lease liability adjusted by an amount of any prepaid expenses. Under Ind AS 116 “Leases”, at commencement of lease, the Corporation recognizes Right-of-use asset and corresponding Lease Liability. Right-of-Use asset is depreciated over lease term on systematic basis and Interest on lease liability is charged to Statement of Profit and Loss as Finance cost.

NOTE 46

The Corporation has numerous transactions with other oil companies. The outstanding balances (included under Trade Payables / Trade Receivables, etc.) to/ from them and certain other outstanding credit and debit balances are subject to confirmation/ reconciliation. Adjustments, if any, arising therefrom are not likely to be material on settlement and are accounted as and when ascertained.

NOTE 47

Cabinet Committee of Economic Affairs (CCEA) Government of India, in its meeting held on November 20, 2019, had accorded in-principle approval for strategic disinvestment of Government of India's Shareholding in the Corporation. Vide its letter dated June 3, 2022, the Government of lndia conveyed the decision of Alternative Mechanism to call off the present process for strategic disinvestment of the Corporation. Accordingly, all the activities in connection with the disinvestment process have been discontinued at the Corporation's end.

NOTE 50 EMPLOYEE BENEFITS[A] Post Employment Benefit Plans:Defined Contribution Scheme

Defined Contribution Scheme (DCS) was introduced effective January 1, 2007 and a defined percentage of the salary of eligible employees out of their total entitlements on account of superannuation benefits is contributed by the Corporation towards the same. A portion of Up to 10% of the salary of the eligible employees is currently being contributed to GOI managed PFRDA (Pension Fund Regulatory and Development Authority) National Pension Scheme (NPS) and the balance is being contributed to separate Trusts managed by the Corporation.

Defined Benefit Plans

The Corporation has the following Defined Benefit Plans:-Gratuity:

The Corporation has a Defined Benefit Gratuity plan managed by a Trust. Trustees administer the contributions made to the Trust, investments thereof etc. Based on actuarial valuation, the contribution is paid to the trust which is invested in plan assets as per the investment pattern prescribed by the Government. Gratuity is paid to a staff member who has put in a minimum qualifying period of 5 years of continuous service, on superannuation, resignation, termination or to his nominee on death.

Other Defined Benefits include:

(a) Post Retirement Medical Scheme (managed by a Trust) for eligible employees, their spouse, dependent children and dependent parents;

(b) Pension / Ex-Gratia scheme to the retired employees who are entitled to receive the monthly pension / ex-gratia for life;

(c) Death in service / Permanent Disablement benefit given to the spouse of the employee / employee, provided the deceased's family / disabled employee deposits with the Corporation, retirement dues such as Provident Fund, Gratuity, Leave Encashment etc., payable to them;

(d) Resettlement allowance paid to employees to permanently settle down at the time of retirement;

(e) Felicitation benefits to retired employees on reaching the age related milestones; and

(f) The Corporation makes contribution towards Provident Fund, which is administered by the trustees. The Corporation has an obligation to fund any shortfall on the yield of the trust's investments over the interest rates declared by the Government under EPF scheme.

These defined benefit plans expose the Corporation to actuarial risks, such as longevity risk, interest rate risk, and market (investment) risk.

[B] Provident Fund

The Corporation's contribution to the Provident Fund is remitted to a separate trust established for this purpose based on a fixed percentage of the eligible employees' salary and charged to Statement of Profit and Loss. Shortfall, if any, in the fund's revenues based on the EPFO specified rate of return, will need to be made good by the Corporation and is charged to Statement of Profit and Loss. The actual return earned by the fund has been higher than the EPFO specified minimum rate of return in most of the earlier years. During FY 2022-23, subsequent to the merger of Bharat Oman Refineries Limited (BORL) with the Corporation, provident fund contributions of employees of erstwhile BORL, which were earlier deposited with the Regional Provident Fund Commissioner (RPFC), are now being remitted to Provident Fund Trust managed by the Corporation.

During FY 2023-24, there was no settlement of defaulted securities, However, during FY 2022-23, settlement of certain defaulted securities (against which provisions were created in earlier periods) were completed. The provision against certain defaulted securities as on March 31, 2024 is K 94.17 crore (Previous year I 94.17 crore). Against the provision, the advance given by the Corporation to the Trust stands at K 88.73 crore as on March 31, 2024 (Previous year I 88.73 crore). The Fund balance is sufficient to meet the fund obligations as on March 31, 2024 and March 31, 2023.

(i) Major transactions entered with Petronet LNG Limited: K 7,644.73 crore (Previous period: I 9,140.75 crore), Falcon Oil And Gas B.V.: K 2863.35 crore (Previous period: I 3,693.45 crore), Indraprastha Gas Limited: K 1,423.08 crore (Previous period: I 1,204.63 crore)

(ii) Major transactions entered with Sabarmati Gas Ltd.: K 509.27 crore (Previous period: I 524.78 crore) and Indraprastha Gas Limited: K 464.41 crore (Previous period: I 481.21 crore)

The outstanding balances are unsecured (except Loans and gurantees outstanding) and are being settled in cash except advance against equities which are settled in equity.

# Investment in equity is shown as a transaction only on allotment of shares. Pending such allotment, any amount paid as advance against equity is shown as a balance outstanding at period end.

@ Pursuant to in-principal approval of Board of corporation at its meeting held on October 27, 2023, process for voluntary winding up has been initiated.

^A Ujjwala Plus Foundation is a Joint Venture of IOCL, BPCL and HPCL with fund contribution in the ratio of 50:25:25 respectively which was incorporated as a company limited by guarantee (without share capital) under Section 8 of Companies Act, 2013 whereunder the Corporation has undertaken a guarantee to contribute I 0.05 crore at the time of winding up if required. Board of Corporation at its meeting held on October 27, 2023 has accorded in-principal approval for closure of Ujjwala plus foundation.

c) In the ordinary course of its business, the Corporation enters into transactions with other Government controlled entities (not included in the list above). The Corporation has transactions with other Government-controlled entities, including but not limited to the following:

• Sales and purchases of goods and ancillary materials;

• Rendering and receiving of services;

• Receipt of dividends;

• Loans and advances;

• Depositing and borrowing money;

• Guarantees; and

• Uses of public utilities.

These transactions are conducted in the ordinary course of business on terms comparable to those with other entities that are not government controlled entities.

BPRL and an impairment loss of K 1,798.02 crore (Previous year I 1,359.96 crore) has been recognized based on the value in use of assets as on March 31, 2024. Such impairment loss is shown as an exceptional item in Statement of Profit and Loss for the year ended March 31, 2024. The accumulated impairment loss on investments in BPRL as of March 31, 2024 is K 5,190.77 crore (Previous year I 3,392.75 crore).

NOTE 55 ENERGY SAVING CERTIFICATES (ESCerts)

As at March 31, 2024, the Corporation holds 2,06,937 Nos. (Previous year 2,06,937 Nos.) of ESCerts awarded by Bureau of Energy Efficiency (BEE) in FY 2021-22 as part of “Performance, Achieve & Trade” (PAT) scheme, India for achieving reduction in Specific Energy Consumption above targets set by them for the performance during FY 2018-19. These can be redeemed to meet refineries own shortfall (if any) or can be used as tradable certificates which can be sold through power exchanges. According to the Indian Energy Exchange's market fluctuations, current values of ESCerts are volatile. Considering unascertainability of cost of ESCerts since such cost cannot be derived directly, the same has not been carried in inventory.

NOTE 56 IMPAIRMENT OF ASSETS

The Corporation assesses at each reporting date, whether there is an indication for impairment of assets. The Corporation takes into consideration external and internal sources of information available about the asset to check whether any indication for impairment exists. If any such indication exists, the Corporation estimates the recoverable amount of the asset. The recoverable amount is the higher of an asset's fair value less cost of disposal and value in use. The value in use is assessed based on the estimated future cash flows which are discounted to their present value using the discount rate that reflects the time value of money and risk specific to the assets for which the future cash flows estimates have not been adjusted. An impairment loss is recognized in the Statement of Profit and Loss to the extent asset's carrying amount exceeds its recoverable amount.

Based on the assessment, there is no indication of impairment of assets except for the Corporation's investment in subsidiary company Bharat Petro Resources Limited (BPRL). The gross carrying value of investment in BPRL as of March 31, 2024 is K 10,926.37 crore (Previous year I 9,601.37 crore). BPRL is an upstream company and is having investments in Oil and Gas Blocks globally and in India, either directly or through its Subsidiaries (including step down Subsidiaries), Joint ventures and Associates. During the current financial year, BPRL has impaired investments in its subsidiary company due to change in prospects of its blocks. Accordingly, impairment testing was carried out on equity investment made by the Corporation in

* The above expenditure includes contribution to funds, expenses through registered trusts / registered society, company established under Section 8 of the Companies Act, 2013 and direct expenses towards implementation of CSR activities by the Corporation. Further, the expenditure in FY 2022-23 includes amount of I 36.24 crore which was spent in excess of requirements under Companies Act, 2013 in the earlier financial years by erstwhile BORL and is available for set off against the CSR Obligation.

# Includes payables of K 5.63 crore (Previous year: I 8.75 crore)

@ The opening balance of K 108.92 crore for FY 2023-24 includes I 79.99 crore for FY 2022-23 transferred to a separate Unspent CSR bank account on April 29, 2023, I 24.18 crore for FY 2021-22 transferred on April 29, 2022 and I 4.75 crore for FY 2020-21 transferred on April 30, 2021.

^A The closing balance of K 157.49 crore for FY 2023-24 includes I 4.57 crore of FY 2021-22 transferred on April 29, 2022, I 65.34 crore of FY 2022-23 transferred on April 29, 2023 and I 87.58 crore for FY 2023-24 transferred on April 30, 2024.

Reason for shortfall

The shortfall of I 157.49 crore from the stipulated and prescribed spend is on account of delay in certain projects due to limitations faced by implementing agencies which were beyond their control. However, the shortfall has been earmarked against the specific projects and would be spent as per the provisions of the Companies Act, 2013.

Nature of CSR Activity undertaken by the Company

The projects which are in alignment with the areas specified under Schedule VII of the Companies Act, 2013 are undertaken by the Corporation. Further, in order to have quantitative and qualitative impact, Corporation has adopted five core thrust areas viz. Health & Sanitation, Education, Skill Development, Environmental Sustainability, and Community Development.

C. Financial risk management Risk management framework

The Corporation's Board of Directors has overall responsibility for the establishment and for overseeing of the Corporation's risk management framework. The Risk Management Committee of the Board has defined roles and responsibilities, which includes reviewing and recommending the risk management plan and the risk management report for approval of the Board with the recommendation of the Audit Committee. The Corporation has adopted a Risk Management Charter and Policy for self-regulatory processes and procedures for ensuring the conduct of the business in a risk conscious manner.

The Corporation has exposure to the following risks arising from financial instruments:

i. Credit risk;

ii. Liquidity risk; and

iii. Market risk

C.i. Credit risk

Credit risk is the risk of financial loss to the Corporation if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Corporation's trade and other receivables, cash and cash equivalents and other bank balances, derivatives and debt securities. The maximum exposure to credit risk in case of all the financial instruments covered below is restricted to their respective carrying amount.

(a) Trade and other receivables from customers

Credit risk in respect of trade and other receivables is managed through credit approvals, establishing credit limits and monitoring the creditworthiness of customers to whom the Corporation grants credit terms in the normal course of business.

As at March 31, 2024 and March 31, 2023, the Corporation's retail dealers, industrial and aviation customers accounted for the majority of the trade receivables.

Expected credit loss assessment for Trade and other receivables from customers as at March 31, 2024 and March 31, 2023

The Corporation uses an allowance matrix to measure the expected credit losses of trade and other receivables.

The loss rates are computed using a 'Roll Rate' method based on the probability of receivable progressing through successive stages of delinquency to write off. Roll rates are calculated separately for exposures in different segments based on the following common credit risk characteristics - type of product purchases, type of customers.

The Corporation does not provide for any loss allowance on trade receivables where risk of default is negligible such as receivables from other oil marketing companies, if any, hence the same is excluded from above.

Loss rates are based on actual credit loss experience over the past three years.

(e) Investment in Debt Instruments

Investment in debt instruments mainly include loans to subsidiary, joint venture companies, investment in government securities and debt schemes of mutual fund which do not carry any significant credit risk.

C.ii. Liquidity risk

Liquidity risk is the risk that the Corporation will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset.

Liquidity risk is managed by Corporation through effective fund management. The Corporation has obtained fund and nonfund based working capital lines from various banks. Furthermore, the Corporation has access to funds from debt markets through Commercial Paper programs, Foreign Currency Borrowings and other debt instruments.

The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, and include estimated interest payments;

(b) PMUY and Other Loans

As per the Government of India's scheme - Pradhan Mantri Ujjwala Yojana (PMUY), the Corporation has given interest free loans to PMUY customers towards cost of hot plate and 1^st refill, which is to be recovered from the subsidy amount payable to customer when such customers book refill. During the year, the Corporation has recalculated gross carrying amount of the loans at period end at the present value of the estimated future contractual cash flows discounted at the original effective interest rate due to revision in estimates of receipts based on projections of subsidy amount per refill. Accordingly, the gross carrying amount of the loans has been reduced by K 6.90 crore (Previous year: I 5.24 crore) with a corresponding recognition of expense in the Statement of Profit and Loss.

The Corporation assesses the credit risks / significant increases in credit risk on an ongoing basis throughout each reporting period. For determining the expected credit loss on such loans, the Corporation considers the time elapsed since the last refill for determining probability of default on collective basis. Accordingly, the expected credit loss of K 218.62 crore (Previous year: I 128.07 crore) has been recognized on carrying amount of K 513.47 crore (Previous year: I 577.12 crore) of PMUY Loans. (Refer Note 9 and 18)

(c) Cash and Cash equivalents and Other Bank Balances

The Corporation held cash and cash equivalents and other bank balances of K 4,490.64 crore at March 31, 2024 (Previous year: I 2,120.44 crore). The cash and cash equivalents are held with bank / financial institution counterparties have good credit ratings/ good market standing. Also, Corporation invests its short-term surplus funds in bank fixed deposits, Tri Party Repo etc., which carry lesser mark to market risks for short duration.

(d) Derivatives

The derivatives are entered into with banks, financial institutions and other counterparties with good credit ratings. Further exposures to counter-parties are closely monitored and kept within the approved limits.

through project finance under which an amount of USD 15.4 billion has already been finalized. BPCL has provided a Debt Service Undertaking (DSU) to guarantee its pro rata share (i.e. towards BPRL Venture Mozambique BV's Participating Interest (PI) of 10% in the project) of project finance obligations to any project finance beneficiaries under project financing arrangement, capped at a maximum of USD 1.92 billion (out of which the draw down was USD 28.73 million as at March 31, 2024) (Draw down was USD 28.73 million as at March 31, 2023).

These guarantee amounts will be payable on default by the concerned entity. As of the reporting date, none of the subsidiaries have defaulted and hence, the Corporation does not have any present obligation to third parties in relation to such guarantees. The bifurcation of contractual cash flows in different years is based on expiry of said guarantees.

C.iii. Market risk

Market Risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises four types of risk: currency risk, interest rate risk, commodity risk and other price risk.

C.iii.a Currency risk

The Corporation is exposed to currency risk on account of its operating and financing activities. The functional currency of the Corporation is Indian Rupee. Our exposure is mainly denominated in US Dollars (USD). The USD exchange rate has changed substantially in recent periods and may continue to fluctuate substantially in the future.

The Corporation has put in place a Financial Risk Management Policy to identify the most effective and efficient ways of managing the currency risks. The Corporation uses derivative instruments, (mainly foreign exchange forward contracts) to mitigate the risk of changes in foreign currency exchange rates in line with the policy.

The Corporation does not use derivative financial instruments for trading or speculative purposes.

Fair value sensitivity analysis for fixed-rate instruments

The Corporation accounts for certain investments in fixed-rate financial assets such as investments in Oil bonds and Government Securities at fair value through profit or loss. Accordingly, a decrease in 25 basis points in interest rates is likely to increase the profit or loss (before tax) for the year ending March 31, 2024 by K 10.08 crore (Previous year: I 19.26 crore) and an increase in 25 basis points in interest rates is likely to decrease the profit or loss (before tax) for the year ending March 31, 2024 by K 9.68 crore (Previous year: I 19.14 crore).

Cash flow sensitivity analysis for variable-rate instruments

A reasonably possible change of 25 basis points in interest rates at the reporting date would have increased (decreased) profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency exchange rates, remain constant. In cases where the related interest rate risk is capitalized to Property, Plant and Equipment, the impact indicated below may affect the Corporation's income statement over the remaining life of the related Property, Plant and Equipment.

C.iii.c Commodity rate risk

Corporation's profitability gets affected by the price differential (also known as Margin or Crack spread) between prices of products (output) and the price of the crude oil and other feed-stocks used in production (input). Prices of both are set by markets. Hence Corporation uses derivatives instruments (swaps, futures, options and forwards) to hedge exposures to commodity price risk to cover refinery operating cost using Basic Swaps on various products' cracks like Naphtha, Gasoline (Petrol), Jet/Kerosene, Gasoil (Diesel) and Fuel Oil against Benchmark Dubai Crude. Further volatility in freight costs is hedged through Freight Forwards and bunker purchases. Settlement of all derivative transactions take place on the basis of monthly average of the daily prices of the settlement month quoted by Platts.

Corporation measures market risk exposure arising from its trading positions using value-at-risk (VaR) techniques. These techniques make a statistical assessment of the market risk arising from possible future changes in market prices over a one-day holding period.

Corporation uses historical model of VaR techniques based on variance/covariance to make a statistical assessment of the market risk arising from possible future changes in market values over a 24-hour period and within a 95% confidence level. The calculation of the range of potential changes in fair value takes into account positions and the history of price movements for last two years. Since there are no open positions as on March 31, 2024, VAR for open position as on March 31, 2024 is NIL.

C.iii.d Price risk

The Corporation's exposure to equity investments' price risk arises from investments held by the Corporation and classified in the financial statements at fair value through OCI. The Corporation intends to hold these investments for long-term for better returns and price risk will not be significant from a long-term perspective.

A. The Corporation has Triparty Repo Settlement System limits from Clearing Corporation of India Limited, the borrowing against which was K 299.83 crore as at March 31, 2024 (Previous Year Nil). These limits are secured by 7.59% Government Stock 2026 of face value aggregrating to K 370.00 crore (Previous Year I 370.00 crore). [Refer Note no. 14]

B. The Corporation has Clearcorp Repo Order Matching Systems (CROMs) limits from Clearing Corporation of India Limited, the borrowing against which was K 1,699.96 crore as at March 31, 2024 (Previous Year Nil). These limits are secured by Oil Marketing Companies GOI Special Bonds of face value aggregrating to K 3,882.37 crore (Previous Year NIL). [Refer Note no. 14]

C. The Corporation purchases and sells petroleum products from different Oil and Gas Companies. Under the terms of the agreement, the amounts payable by the Corporation are offset against receivables and only the net amounts are settled. The relevant amounts have therefore been presented net in the balance sheet.

NOTE 60 CAPITAL MANAGEMENT

The Corporation's objective is to maximize the shareholders' value by maintaining an optimum capital structure. Management monitors the return on capital as well as the debt equity ratio and makes necessary adjustments in the capital structure for the development of the business.

The Corporation's debt to equity ratio as at March 31, 2024 was 0.25 (Previous year: 0.69).

Note: For the purpose of computing debt to equity ratio, Equity includes Equity Share Capital and Other Equity, and Debt includes Current and Non-Current Borrowings.

NOTE 61 SEGMENT REPORTING

As per the requirements of Ind AS 108 on “Operating Segments”, segment information has been provided under the Notes to Consolidated Financial Statements.

Note: Apart from the above;

1. Corporation's subsidiary, Bharat PetroResources Limited (BPRL), is engaged in the business of Exploration and Production (E&P) of oil & gas and has participating interest in several blocks held directly or through group companies. Corporation has issued performance guarantees/ counter-indemnities/ letter of undertakings in favor of Government/ Government Agencies/ Operators/ other partners towards performance obligations of BPRL (including its group companies) under the Concession Agreement/Joint Operating Agreements/ Production Sharing Contracts/ Licenses/ Farmout Agreements relating to various such E&P oil & gas blocks acquired by them. The outflow that may arise under these performance guarantees/ counter-indemnities/ letter of undertakings is not quantifiable.

2. The Corporation has issued Performance Guarantee for necessary infrastructure of terminal and pipelines at Kochi and obligations of Associate Company Petronet LNG Ltd. under the LNG SPA, the outflow that may arise under the same is not quantifiable.

(B) Utilization of Borrowed Funds and share premium

During FY 2023-24, other than the transactions undertaken in the normal course of business and in accordance with extant

regulatory guidelines and internal policies, as applicable,

1. Corporation has not granted any advance/loans or investments or provided guarantee or security or the like to any other person(s) or entities with an understanding, whether recorded in writing or otherwise, to further lend/invest/provide guarantee or security or the like to any other person on behalf of the Corporation.

2. Corporation has not received any funds from any person(s) or entity with an understanding, whether recorded in writing or otherwise, that the Company shall further lend or invest or provide guarantee or security or like in any other person on behalf of an identified by such person(s)/entity.

(C) Registration of charges or satisfaction with Registrar of Companies

There are no charges or satisfaction to be registered with ROC beyond the statutory period.

As per MCA website, a charge of I 246.80 crore is appearing unsatisfied vide charge ID 90165239. As per information

available with the Company, the charge was satisfied vide document number 424 on April 20, 2000 by Registrar of Companies,

Mumbai. Hence the same has not been disclosed in Schedule III.

NOTE 69

Figures of the previous year have been regrouped wherever necessary, to conform to current period presentation and disclosed separately wherever material.